In his column at the Washington Post, Robert Samuelson publishes a letter from a reader that pointedly identifies everything that Mr. Samuelson’s column has not:
I am 54. My background includes a Master’s degree in history and a Certificate in Teaching English as a second language (ESL). I have worked as a journalist and was an ESL instructor for five years at a local college before my job was downsized in 2014 due to budget cuts. Since then, I have been unable to find full-time work, even though I have been diligently networking and applying for jobs. I currently write a monthly business column for The Spartanburg Herald-Journal (for free) about employment issues and also write contracts to try to stay solvent.
Although I agree that our economic expectations were raised during the 1990s’ boom, I don’t think it is a false expectation for Americans to want good-paying, full-time jobs. Unfortunately, many of the 14 million jobs created (since the employment low-point), which you mention in your column, are low-wage, part-time service jobs which are not what people need in order to support themselves and their families. In Spartanburg, very few white-collar jobs have been created. Instead, the new jobs are in fast-food restaurants and distribution centers, which are popping up everywhere due to our low cost of land.
Every day, I read articles from national newspapers, and I am continually dismayed and angered by journalists that accept without question the government statistics of glowing successes in job creation. Whatever happened to investigative journalism? Why aren’t reporters looking beyond the statistics to the thousands of real people still suffering from long-term unemployment?
which are that
- GDP growth doesn’t reflect the reality of the lives of ordinary people and that will remain true as long as the lion’s share of income growth is captured by, well, the lions.
- The decreasing rate of unemployment (to whatever extent it’s real at all) has come through an increase in the number of minimum wage jobs in hospitality and retail rather than an increase in white collar or blue collar jobs that carry decent pay and benefits.
His feeble retort:
It’s hard not to be moved. But it’s also worth remembering that the employment situation has improved.
He still doesn’t get it.
Note the key points of Ms. Lang, the reader’s, letter. Not only does she have a college degree, she has a post-graduate degree. Neither qualify her for any of the jobs being created other than minimum wage jobs or voluntarism. The jobs created? Low wage jobs.
I’ve pointed that out before. When I was in high school and college (and dinosaurs ruled the earth), any student who wanted one could get a part-time job. Nowadays that’s impossible because adults are trying to support themselves and their families doing the jobs that young people used to perform on a part-time basis while still being supported wholly or in part by their parents.
Raising the minimum wage will only solve that problem if the minimum wage doesn’t reflect the demand for minimum wage labor. If it does it will result in fewer minimum wage jobs, a perverse outcome. More education won’t solve the problem if most of the jobs being created pay minimum wage.
What, then, is to be done? I think the solutions are to suspend the importation of workers from other countries, reducing the supply of low wage workers and the competition for jobs that pay higher wages, and to focus less attention on the top .1% of income earners and a lot more on the balance of the top decile of income earners. Many of those earners work in sectors that are highly regulated and their wages are a consequence of rent-seeking. If you can’t raise the bridge, lower the water.
To add insult to injury, Spartanburg, or at least Greenville-Spartanburg was highlighted in one of James Fallow’s articles a couple of years ago about cities that work. Basically the area got a BMW plant and Greenville successfully renovated its downtown with restaurants, hotels, bars and shopping. They also have a good rail connection to the coast and a solid airport.
So this area is an economic success story from 10,000 feet, but I suspect the BMW plant employs less than the textile plants from before, and the jobs in retail and distribution are low-paying.
It’s a good-sized plant. Reportedly, 10,000 people work there. But you’re probably right.
Yeah, it also looks like there also are auto parts businesses in the areas as well. Some of the story might be that vast government subsidies to BMW to locate and subsequently expand, including property tax exemptions, have depleted the government’s ability to pay for public services, such as education, police/fire and road construction.
Probably a lot of different truths to be found, but one might be that the economy needs to be diverse.
which brings up another point. What does a master’s in history qualify you for? Being a high school teacher, assuming you go on to get the necessary teaching credentials. And those jobs are pretty hard to find. Those who’ve got them aren’t that eager to leave.
The daughter is off to college in 10 days; a for sale sign is in the Naperville home front yard. With a place in Florida, the question becomes where is the other residence. Number one on the list is a series of golf course communities in the Smokey Mtns running from Asheville to Greenville. You guys are exactly right. Greenville is lovely as a nearby small city destination for retirement communities. They have Clemson and Furman, BMW and then a tremendous number of arts and retail/eateries oriented activity, along with basic necessities of life businesses. Not a chance the wage structure is the same as it used to be, despite being a delightful place to be and for those who already have means. This same story is being played out in a number of communities: Naples, FL up to Tampa, plus Port St Lucie and Vero Beach; the Atlantic coast of NC and SC; Austin, TX, Scottsdale AZ, along with coastal California. But its total already haves vs support. The only one peddling economic fiction these days is our president and his sycophants, especially in the media.
Just some thoughts.
“I am 54. My background includes a Master’s degree in history…..etc”
Same as Dave’s. Really, lady. No jobs for that? You don’t say. I’m much more interested in a good machine operator than this woman, and so should everyone
“Every day, I read articles from national newspapers, and I am continually dismayed and angered by journalists that accept without question the government statistics of glowing successes….”
C’mon, you know. The Obama support effort. Even Doug M over at OTB simply dutifully regurgitates standard talking points every time an employment related report is released. It doesn’t take a rocket scientist to do basic deconstruction of reported statistics, or ask “why is public dissatisfaction 70% if all is so rosy?” These people aren’t dumb, it’s willful dishonesty.
“GDP growth doesn’t reflect the reality of the lives of ordinary people and that will remain true as long as the lion’s share of income growth is captured by, well, the lions.”
First, the redefinition of GDP still is almost never reported. Estimated at 1.5% it means that in fact GDP as we have traditionally gaged it in our heads and guts has really been only 0-.5% for several years. Thank the Fed, and anyone not railing against them, for the, um, lions share of income disproportion. One can only note that popping of equity and real asset bubbles will bring down the top echelon income and wealth.
“The decreasing rate of unemployment (to whatever extent it’s real at all) has come through an increase in the number of minimum wage jobs in hospitality and retail rather than an increase in white collar or blue collar jobs that carry decent pay and benefits.”
Heh.
“But it’s also worth remembering that the employment situation has improved.”
Only if you traffic in convenient measurement points. I have a graphic sitting on my desk plotting the ratio of full time workers to population, ages 16-54, (to eliminate the retiring baby boomer explanation tripe) showing it as low today as the Cartervyears, and the depths of the 1981 recession (47-49%), having spent the 20 years prior to 2007 in the range of 51-55%. Some recovery. They called Trumps speech dystopian. In reality it was truth. Obama’s economy, no matter the reasons, has been miserable. It simply has.
70% public dissatisfaction. Economic, foreign policy, race relations…. The only way to explain that and Trumps surprising popularity despite being a goon is that the current administration has given us a shit sandwich. No matter how they, HRC or their sycophants in the media spin it, it tastes like shit.
“What, then, is to be done? I think the solutions are to suspend the importation of workers from other countries, reducing the supply of low wage workers and the competition for jobs that pay higher wages”
You Trumpian, you.
“focus less attention on the top .1% of income earners and a lot more on the balance of the top decile of income earners. Many of those earners work in sectors that are highly regulated and their wages are a consequence of rent-seeking.”
That means kicking the Fed in the ass, and reducing the influence of government. As much as it pains me, I might actually pull the lever for Trump, solely because I think there is a sliver of a chance he will shake this BS system up, and with Clinton there is no chance whatsoever. But pulling that lever might require alcohol and be accompanied by clammy hands and nausea.
5 comments
A higher minimum wage will result in job growth if the turnover rate of new spending is sufficient to increase business expectations of profits that warrant higher costs, shifting the equilibrium point of effect demand toward full employment. They key is that expectations must change and then be met or exceeded.
If not, firms will return to a previous equilibrium point associated with lower costs and labor demand.
Trump knows what he’s doing as far as winning the election, which I think he might, but he’s full of shit about the Wall and return of the illegals. Both he and Sheldon Adelson employ through subcontractors many thousands of these good people. They enjoy the lack of matching SSI employer benefits, the lack of health benefits, the lack of workman’s compensation insurance and a steady supply of willing, uncomplaining workers who are young and unconcerned with benefits or retirement.
I would like to see these workers, though illegal, be able to receive worker I.D.’s of some sort so we know who they are, where they are, and are paying into the system. And by the way, since they are not citizens they could be taxed a surcharge to help with our underfunded pension system. After all if they don’t like it they can go home. No place like home.
But you know why no Pol’s are talking like me? None of them clean their own homes, pools, lawns, or even watch their own kids
You’re assuming that people who’ve disregarded our laws when they interfered with what they wanted to do will suddenly start obeying them. I see no reason to believe that’s the case.
Sadly, no. It violates several provisions of the U. S. Constitution including the Equal Protection Clause and, arguably, the Privileges and Immunities Clause.
Ben:
That’s an interesting scenario but unless you’re suggesting that “new spending” come from some source other than the increase in wages it sounds very much to me like you’re making an argument for perpetual motion. It’s why I think that wage subsidies are a much better idea than increasing the minimum wage.
Increasing the minimum wage may also have run-on effects. For example, workers with minimum wage multiple contracts get an automatic raise when the minimum wage rises. Those wage increases may cause a loss of jobs among non-minimum wage workers. Employment conditions vary so much from place to place citing the experience in jurisdictions already experiencing rapid wage growth may not be relevant to areas that aren’t and vice versa.
Hence, my view: raising the national minimum wage to $15/hour is probably not a good idea. Seattle’s increasing its minimum wage to $15/hour may have no adverse effects on present or future job growth while Chicago’s doing the same may have a different set of effects.
From the article, I gather Samuelson’s writer does not like being a member of the gig economy and having to live below the station they feel entitled to. Such people are never satisfied even if minimum wage goes up because of fewer immigrants.
He still doesn’t get it.
Or, he’s a lying scumbag. Either way, people like Samuelson should be tied up in public squares and should be beaten with sticks every day. The people he shills for should all have mandatory height reduction surgery.
And by the way, since they are not citizens they could be taxed a surcharge to help with our underfunded pension system.
Yes, because American history has no examples of deleterious effects of importing labor that can’t claim the same rights as everyone else.
As for the wall not working… Well, that’s one visible part of it. But I’ll note that the Dems seem to think walls are fine at their convention, the President is giving money to Jordan to build walls on THEIR border, and even the Mexicans are working on a wall to stop illegal immigration – on their southern border, naturally.
The wall is one part. Go after employers that hire illegals, and start meting out prison time to said employers. That’ll start changing the situation quite quickly.
As much as it pains me, I might actually pull the lever for Trump, solely because I think there is a sliver of a chance he will shake this BS system up, and with Clinton there is no chance whatsoever.
Welcome to the riot.
Dave: What I called new spending (which, admittedly, wasn’t the best term) is derived from multiple sources and knock-on effects. The immediate source is to draw from corporate profits and savings currently at an all-time high and inject them at the bottom of the wage structure. If they’re spent then you get a boost to turnover and increased sales, etc.
Government spending will also expand as higher wages mean higher SS payouts, higher unemployment benefits which are now linked to incomes, paying higher prices to contractors. In this scenario things turn out well because businesses see evidence their current profit expectations are too low.
The other possibility is the new wages aren’t spent because the people earning them are so heavily indebted the income is used to deleverage. If this happens employers other than finance might lower their expectations and fall back, resulting in a net loss of employment.
I’m not sure anyone advising out government pays the slightest attention to those expectations, to reducing the level of fear which holds investment and labor demand back.
Okay. Under your scenario there won’t be much new spending. What will actually happen is that some workers will spend more. That spending will be offset by employers spending less. Most of the employers affected are small operations. They aren’t saving a lot.
If the only employers affected were large firms with lots of cash-on-hand, you could be right. Unfortunately, those firms won’t be affected much. They don’t hire a lot of minimum wage employees.
Never mind the bollocks, gentlemen, the economy is growing like gangbusters, so this whole discussion is irrelevant!
Dave,
Businesses will reduce spending if their expectations aren’t met. This is Keynes’ conception of uncertainty combined with the neoclassical idea of the profit-maximizing firm. They seek maximum profits for a given level of cost and will only accept increased costs if they see potential. My concern is we’ll just raise the minimum wage and leave the rest to fate; in thst scenario we’ll see a small decrease in employment and more downward wage pressure against people earning more than the minimum.
That’s a good description of what I think will happen.
Speaking of the minimum wage, the preliminary results from Seattle look decidedly mixed.
“The economy is growing gangbusters…”
Must be the minwage increases…..